This year's London Book Fair opens today, with a special focus on China. With 1.3 billion people, it's one of the biggest markets for the publishing industry. But Chinese publishers face the same challenges as their overseas counterparts - that is, the threat of the digital age.

E-books have forced almost 50 percent of Chinese bookstores out of business, in the past two years alone. Laura Luo spoke with China Publishing Group, which is behind the translated version of Harry Potter, on how Chinese publishers can survive the digital onslaught.

Reporter: "For nearly 2,000 years, paperback books have played a major part in the lives of Chinese readers. But now things are starting to change, as more and more people are shifting to electonic books. Many bookstores have therefore gone out of business."

And it's not just China. Even America's second largest bookstore, Borders, couldn't survive the digital jungle.

But China Publishing Group, which publishes Harry Potter in Chinese, is confident paper books have a role in the future.

Liu Bogen, vice president of China Publishing Group Corporation, said, "The more people read electronic books, the less would read paperbacks. But when it reaches a certain stage, digital books and print books will co-exist in the Chinese market. And it will be in all kinds of formats: internet, digital and mobile."

According to a report from the 2011 Electronic Book Industry Summit, sales of digital readers in China surged to nearly two million in 2010, a 50 percent increase from a year before. However, book sales have barely moved.

Liu said, "Annual book sales sit at around 60 to 70 billion yuan, and this number has barely changed for the past few years."

To survive, Liu believes a change in business model is essential, but the effect won't be seen immediately.

Liu said, "We are actively preparing for the arrival of the digital era. But it needs a very strong platform, simply using other platform providers such as the Ipad will not bring much profit to publishers. We are still in search of a good business model. Investing in digital books will take a long time to see any positive return, at this stage the turnout is negative in most cases."

Mr Liu points out, one major problem for the Chinese publishing industry is the lack of creativity: out of large amount of the new books published each year, half are text books, and the majority of the rest are reprints of classic books. Very few are new top sellers. China Publishing Group is hoping to change this - at this year's London Book Fair, it's planning to bid for J.K. Rolling's new book.